2015 Sustainability Report

CHAIRMAN’S MESSAGE

What We’ve Built.
What We’re Solving.

Since our first days as a company, Caterpillar has designed and built the world’s most powerful, innovative and durable machines and engines. Our customers put them to work on projects that help the world grow and develop, supporting sustainable progress and improved living standards for people everywhere.

Sustainability doesn’t ever go out of style or focus at Caterpillar, even when we face difficult business conditions. We know it’s essential for economic growth – and growth is essential to our business. Whether we are in an up or a down cycle, we seize the opportunity to develop even more efficient solutions for our customers and within our operations.

Although we can point to hundreds of examples in our 90-year history and in the global challenges we’re helping to solve today, I will highlight only a few of them here.

What We’ve Built

Sustainable progress requires energy, but even today, 1.1 billion people in the world lack access to the benefits of reliable electricity. As a global energy consumer and major manufacturer of energy conversion and power-generation products, Caterpillar is uniquely positioned to leverage innovation to meet the world’s growing energy needs.

Our products bring traditional, renewable and alternative energy options to urban, rural and remote communities. We have hundreds of distributed power generation systems operating all over the world. These systems improve energy access while emitting fewer greenhouse gases (GHG) than traditional power grid systems. We provide combined heat and power systems and combined-cycle power systems that can double the efficiency of power generation when compared with conventional power grids.

Our energy solutions also include hydropower, methane from landfills, microgrid solutions and backup generators to supplement wind power. Cat® products have helped construct hydropower dams in every region of the world, including the Hoover Dam in the United States, the Bhakra Dam in India, the Yacyreta Dam in Paraguay and Argentina and the Owens Falls Dam in Uganda – just to name a few.

In the world’s mining industry, Cat® machines dig, haul and transport the copper, iron ore, gold and other commodities necessary to construct the things that keep communities connected – from bridges to railways to smartphones. Our products and services also help our mining customers to be more efficient and safer on their jobsite, reducing fuel consumption and identifying operator fatigue.

Cat machines create new and repair existing infrastructure, which improves access to energy, clean water, schools and hospitals. Infrastructure also supports trade and makes it possible for a worker to get to their job. In the United States, Cat products have helped build more than 77,000 miles of highways since 1944. Our machines helped widen the Panama Canal in the 1960s and are at work widening the Canal again now. Cat machines helped construct the German Autobahn, the Kansai International Airport in Osaka, Japan, and the BR 101, the major coastal highway that runs the length of Brazil and is part of the Pan-American Highway.


We have also built a valuable business, and contributed to resource conservation, since we began remanufacturing engines in 1973. For more than 40 years, we have been a big part of what is now called the Circular Economy. Through remanufacturing we return our products to same-as-when-new condition; this reduces the use of additional raw materials, ultimately enabling us to conserve precious natural resources.

These are examples of the sustainable products and solutions we’ve brought to our customers. We also have many examples of Caterpillar’s sustainability commitment to our people.

From 2014 to 2015, we continued to improve our trend toward world-class performance in safety with a 17 percent reduction in Recordable Injury Frequency (RIF) and a 13 percent reduction in Lost-Time Case Frequency Rate (LTCFR). A safe work environment is our first priority and over the last 15 years, we have improved RIF by about 90 percent. That is fantastic progress! But we know even one injury is one too many – that’s why our goal is zero.

Caterpillar’s Diversity & Inclusion (D&I) progress has earned several accolades, and our Employee Resource Groups help drive innovation and an environment where every employee feels heard and valued. We’re committed to constant learning and improvement and confident D&I strengthens our team.

In addition, Caterpillar employees contribute their time and resources to promote the health and welfare of communities where we work and live. Since 1952, the Caterpillar Foundation has invested hundreds of millions of dollars to transform lives through education, environmental stewardship and emergency relief. Today, the Foundation invests in programs like microfinance and access to clean water and better sanitation, always focused on their mission: alleviating the root causes of poverty.

What We're Solving

Of course, even with this incredible history, our work isn’t done. We’re still working to solve challenges facing the world’s people. We believe it is possible to promote progress and balance economic growth with society’s needs and with less impact on the environment. Finding that balance is fundamental to our sustainability commitment.

In 2015, we joined an effort to focus on restoring natural infrastructure – the forests, prairies, farmlands, wetlands and coastal landscapes that play a vital role in supporting sustainable global development. Natural infrastructure improves resilience to natural disasters like storms and floods, improves water quality and removes carbon from the atmosphere to return it to the soil, where it helps plants grow. Cat® products have supported coal mine restoration projects and restored portions of the Florida Everglades.

We were also honored to receive the “Vision for America” Award from Keep America Beautiful – a prestigious recognition for our corporate commitment to sustainability and significant progress toward achieving aggressive sustainability goals.

In 2015, Caterpillar entered a strategic alliance with solar industry leader First Solar to develop and distribute Cat-branded photovoltaic modules for incorporation into microgrid systems that can be utilized anywhere from remote villages to mining operations. This innovative technology will help us provide power to remote places where, before now, it’s been either unavailable or unreliable.

Vision for America Award Recipient


In November 2015, Caterpillar Inc. was recognized by Keep America Beautiful as the recipient of the national nonprofit’s prestigious “Vision for America” Award. This national award recognizes a U.S. company’s accomplishments in leading sustainability initiatives in communities across the country. Caterpillar was recognized for our corporate commitment to sustainability and our significant progress toward aggressive sustainability goals.

We’re always innovating and improving to build products that are both valuable to our customers and more sustainable. Examples this year include an upgrade to the Cat® D6K2 grading tractor that improved performance while also reducing fuel consumption, and improvements to the transmission systems of our new generation of medium wheel loaders that result in large fuel savings and less jobsite GHG emissions.

We’re applying advanced analytics and digital-driven technologies – like Cat® Connect and MineStar™ – to improve worksite efficiency. This means less fuel used, increased productivity and a safer work environment. We also offer our customers Job Site Solutions, a true collaborative effort focused on improving job site efficiency. Our solutions business model is designed to go “beyond the iron” to increase asset utilization, which is so important for our customers’ sustainability goals.

The intersection of sustainability and innovation includes improving our internal operations. New process innovations – like using combined heat and power for alternative energy – are reducing the environmental impact of our manufacturing facilities. For example, as of 2015, Caterpillar has reduced GHG emissions intensity from our facilities by 32 percent compared with our 2006 base year. From 2014 to 2015, our absolute GHG emissions have declined 7 percent. We’re constantly pushing to reduce water and resource usage and minimize waste in every facility. Our achievements here are due to the ingenuity and dedication of the skilled men and women who are on the front lines manufacturing our products.

I also believe one of the primary reasons Caterpillar has thrived for 90 years is because we are a company built on values, including sustainability, the value highlighted in this report.

I’m incredibly proud of what we’ve built and what we’re solving. Neither our accomplishments nor our goals are small or inconsequential. Given that we are Caterpillar, that shouldn’t surprise anyone.

Doug Oberhelman
Chairman & CEO